scholarly journals Control and Management of Business Risks using Internal Audit Methods

2020 ◽  
Vol 8 (1) ◽  
pp. 86-90
Author(s):  
Nataliya Kazakova ◽  
Svetlana Chikurova
Keyword(s):  
Risk Management ◽  
Internal Control ◽  
Internal Audit ◽  
Business Activity ◽  
Business Risk ◽  
Internal Auditors ◽  
Internal Control System ◽  
Business Efficiency ◽  
Control And Management ◽  
And Control

The article discusses practical issues of business risk management based on internal audit tools aimed at improving the efficiency of the company's internal control system. Methodical recommendations have been proposed for the establishment of an internal system of identification and control of corporate risks with the help of assessment reserves. A methodical tool kit is presented, allowing internal auditors to identify existing risks of business activity, to develop timely measures aimed at preventing errors in accounting, financial irregularities, as well as to improve business efficiency, in general.

scholarly journals UPRAVLJANJE RIZICIMA I INTERNA REVIZIJA

2021 ◽  
Vol 9 (1) ◽  
pp. 48-57
Author(s):  
Zorica Jović
Keyword(s):  
Risk Management ◽  
Internal Audit ◽  
Basic Element ◽  
Security Measures ◽  
Management Framework ◽  
Internal Auditors ◽  
Consulting Services ◽  
Risk Management Framework ◽  
Enterprise Risk ◽  
And Control

People undertake risk management activities to identify, assess, manage, and control all types of events or situations. This can range from a single project or narrowly defined types of risk, for example, market risk, to the threats and opportunities faced by the organization. Organizations are under pressure to identify all business risks they face - social, ethical, and environmental risks as well as financial and operational - and to explain that they are being managed at an acceptable level. Risk management is a basic element of corporate governance. Management is responsible for establishing and operating the risk management framework on behalf of the board. A company's risk management brings many benefits that result from its structured, consistent, and coordinated approach. The key role of internal auditors concerning enterprise risk management should be to assure the effectiveness of risk management to management. When an internal audit extends its activities beyond this key role, it should apply certain security measures, including treating engagements as consulting services and applying all relevant standards. In this way, an internal audit will protect its independence and the objectivity of its assurance services

scholarly journals Impact of Internal Control on Audit Program Effectiveness: The Case of Vietnam

2018 ◽  
Vol 10 (9) ◽  
pp. 1
Author(s):  
Thi Que Nguyen ◽  
Manh Dung Tran ◽  
Thi Viet Ha Hoang
Keyword(s):  
Risk Assessment ◽  
Internal Control ◽  
Program Effectiveness ◽  
Environmental Control ◽  
Control Environment ◽  
Internal Auditors ◽  
Internal Control System ◽  
And Control ◽  
The Relationship ◽  
Audit Program

This research is conducted to examine the relationship between components of risk assessment, environmental control and control activities of internal control system and the effectiveness of the audit program in Vietnamese firms. Data were collected by sending questionnaires to management, internal auditors, and accountants of Vietnam firms and feedback of 87 responses. By testing Cronbach’s Alpha, Exploratory Factor Analysis (EFA), Analysis of Variables (ANOVA), the results show that control environment, risk assessment and control activities contribute significantly to an effective audit program. These results indicate that Vietnamese firms lack required experiences to cope with the current instruments of internal control assessment.

scholarly journals INTERNAL CONTROL SYSTEM: STRUCTURE, SELF-DEVELOPMENT AND SELF-CONTROL

2018 ◽  
Vol 8 (39) ◽  
pp. 15-22
Author(s):  
Yurii Kiiko
Keyword(s):  
Control System ◽  
Internal Control ◽  
Supervisory Board ◽  
Internal Audit ◽  
Self Control ◽  
System Structure ◽  
Primary Control ◽  
Internal Control System ◽  
Security Compliance ◽  
And Control

Without a coordinated, limited control risk resources cannot be effectively used, and significant risks cannot be identified and properly managed. Internal control is clearly structured and has a vertical hierarchy. The system of internal control consists of three levels and each of them inherent function of improvement of the previous one. The lowest level of control is the control of managers departments as well as primary control during operations with production department. The second level of internal control is the specialized control departments, such as: financial control, security, compliance, risk management, quality management of service or manufactured products, and so on. The functions of these divisions are the development of activities methods in their working area and control implementation of this methods, or compliance with external / legal regulations. Within the limits of their authority, the subjects of control at this level of internal control also develop / propose changes to the control methods (within their competences) which are applied to the first level. The third level is the level of internal audit. The function of internal audit is directed at two main lines: control of operations and settlements; assessment and improvement of the internal control system. Therefore, internal audit, has one of the main tasks, it is the improvement and control of the subjects of the first and second levels of the internal control system. Improvement and development of internal audit is carried out through self-assessment and external evaluation of internal audit (commissioned by the Supervisory Board).

scholarly journals The Risk-based Role of Internal Audit within Albania, Public Organizations

2012 ◽  
Vol 1 (1) ◽  
pp. 11-19
Author(s):  
Holtjana Bello ◽  
Vjollca Karapici
Keyword(s):  
Risk Management ◽  
Public Sector ◽  
Internal Control ◽  
Internal Audit ◽  
Management Control ◽  
Main Question ◽  
Internal Auditors ◽  
Government Organizations ◽  
Internal Audit Function

The aspiration of Albania for European integration has added mandatory requirements for public sector to modernize the internal audit function in adherence with International Internal Auditing Standards. According to such Standards supported by Picket (2005) and CIPFA (2003) the internal audit is an assurance function that provides independent opinion on the effectiveness of internal controls that support the achievement of the organizations objectives. Internal auditors can provide consultancy service, in particular to aid management to improve the organization control environment. Meanwhile, Diamond (2002) explains that the internal audit role, remit, scope and activities are driven by the macroeconomic objectives and political stabilization. For those countries with governance problems the first objective is to ensure compliance with financial laws and regulations. Therefore, the most suitable approach for the internal audit is the compliance auditing to attain macroeconomic stabilization objectives. Therefore, the main question around which this paper is based is whether the public sector in Albania is ready to adopt the modern model of internal audit moving beyond the traditional compliance and financial remit to comply with recognized International Internal Audit Standards. This paper finds that although changes in Albanian normative framework since 2007, internal audit within government organizations are still adopting traditional approach of internal audit involving financial inspections rather than performance auditing activities aiming to provide opinion on risk management, control and governance. This paper analyzes that the embryonic risk culture of Albanian public sector, the lack of skilled internal audit resources and a little understanding of both managers and internal auditors with regard to the contribution of internal audit in risk management and corporate governance system aimed at achieving the government organizations objectives are the main reasons why the risk based model and consultancy role of internal auditors is not yet applied. Therefore, this paper recommends the internal auditors to perform additional consultancy tasks to enhance the internal control system and build the risk management methodologies and structures due to the management lack of knowledge. As soon as the organizations become risk mature the internal auditors can provide assurance appraisal service based on risks. The Practice Advisory Standard 1000 recommends principles which should be used as guidance for regulatory framework of internal audit function within Albania, public sector, guiding internal auditors in order for them to maintain their independence, objectivity and due professional care while conducting consulting service.

scholarly journals Impact of the Effective Internal Control System on the Internal Audit Effectiveness at Local Government Level

2013 ◽  
Vol 4 (1) ◽  
pp. 16-23 ◽  
Author(s):  
Mu’azu Saidu Badara
Keyword(s):  
Control System ◽  
Local Government ◽  
Internal Control ◽  
Local Level ◽  
Internal Audit ◽  
Internal Auditors ◽  
Internal Control System ◽  
Local Government Level ◽  
Audit Effectiveness ◽  
Government Level

Effective internal control system plays an important role in ensuring objective achievement of organizations. Therefore, the aim of this paper is to examine the relationship between effective internal control system and internal audit effectiveness at local government level. The paper is a literature review paper and the paper concluded that effective internal control system can influence the effectiveness of internal auditors at local level. The paper needs to be validated empirically.

scholarly journals CONTROL OF QUALITY AS AN IMPORTANT TOOL FOR DEVELOPMENT OF INTERNAL CONTROL

2019 ◽  
Vol 48 (05) ◽  
pp. 5-7
Author(s):  
Tatia Udesiani
Keyword(s):  
Control System ◽  
Internal Control ◽  
Financial Management ◽  
Internal Audit ◽  
Internal Controls ◽  
Public Institutions ◽  
The Public ◽  
Internal Control System ◽  
Effective System ◽  
And Control

Development of internal controls is a highly important issue for the organization, especially for public institutions, because internal control system creates mechanism to effectively utilize human, financial and time resources. Public institutions are characterized by various risks, such as: uneconomic and unreasonable spending of budget funds, corruption, fraud and so on. In order to reduce these and other risks, it is important that organizations have an effective system of internal control. The internal control system in the public sector is regulatedby the relevant legislation and standards, which determines that internal control includes: Financial management and control system. Functionally independent internal audit and Harmonization Center. Each of them is an integral part of internal control. Their independence is the prerequisite for the existence of an effective system. The article presents results of our research carried out by the internal audit benefit and quality.

INTERNAL CONTROL AND RISK MANAGEMENT AS A PROACTIVE MANAGEMENT TOOL IN CONSTRUCTION COMPANIES

2021 ◽  
Vol 3 (11) ◽  
pp. 133-138
Author(s):  
Lyudmila M. Korchagina ◽  
Keyword(s):  
Risk Management ◽  
Internal Control ◽  
Internal Audit ◽  
Active Management ◽  
Management Tool ◽  
Construction Company ◽  
Construction Companies ◽  
Proactive Management ◽  
Internal Control System ◽  
System Improvement

In modern conditions, the activities of all economic entities, including companies in the con-struction sector, have become much more complicated. In a competitive environment, there is a need for active management of companies through strategic management, risk management, internal audit and system improvement strategies. The article discusses the issues of creating an internal control system that allows risk management and ensures the efficiency of the construction company.

scholarly journals The impact of COSO control components on internal control effectiveness: An internal audit perspective

2013 ◽  
Vol 6 (2) ◽  
pp. 495-518 ◽  
Author(s):  
Houdini Fourie ◽  
Christo Ackermann
Keyword(s):  
Control System ◽  
Internal Control ◽  
Boards Of Directors ◽  
Internal Audit ◽  
Western Cape ◽  
Eastern Cape ◽  
Best Interest ◽  
Internal Auditors ◽  
Internal Control System ◽  
The Impact

Boards of directors have the ultimate responsibility for governance – including internal control – in their organisations. Management is tasked with the design, implementation and maintenance of internal control systems. Internal auditors play a key role in independently evaluating these controls, acting as agents on behalf of the board of directors in order to mitigate the possibility of management not acting in the best interest of the organization, leaving gaps in the internal control system, and, in some instances, doing so in order to enable unlawful personal gain. The Committee of Sponsoring Organisations’ Integrated Framework for Internal Control (hereafter referred to as the COSO framework) is used as a recognised framework, which, if implemented, could result in an effective internal control system and served as the basis for the design of the research instrument of the research. The questionnaire was distributed to internal audit practitioners. Responses were obtained from 31 participants from the Eastern Cape and Western Cape regions in South Africa. The majority of the participants provide internal audit services to the local government sphere of the South African government. This article identifies which characteristics should exist in an organization’s control system that, in the opinion of internal auditors, improve the effectiveness of the internal control system. This study concludes that internal auditors are of the opinion that control characteristics as outlined in the COSO framework for ‘risk assessment’, ‘information and communication’, ‘control activities’ and ‘monitoring’ components of internal control, do contribute to an effective internal control system.

Effect of Financial Control Mechanisms on Performance of Income Generating Units in Selected Public Universities in Kenya

2019 ◽  
Vol 3 (V) ◽  
pp. 286-304
Author(s):  
Shadrack Musunkui Towett ◽  
Isaac Naibei ◽  
Williter Rop
Keyword(s):  
Risk Management ◽  
Internal Control ◽  
Public Universities ◽  
Management Strategies ◽  
Internal Audit ◽  
Simple Random Sampling ◽  
Target Population ◽  
Control Measures ◽  
Financial Control ◽  
Control Mechanisms

In an attempt to bridge the gap between the budgetary allocations and actual expenditures most universities have started income generating units with the aim of boosting their operational expenses. Whereas there is the potential of the use of Income Generating Units (IGUs) to generate additional funds, most universities still experience challenges in full implementation and realization of the revenue goal. This study therefore sought to determine the financial control mechanisms affecting performance of income generating units among selected public universities. The study sought to determine the effect of internal controls, credit policies, financial risk management and internal audit on performance of income generating units in selected universities. Targeted population was all the 290 employees in the IGU departments of selected public universities. The respondents were sampled using simple random sampling so as to enable equal representation of the target population without any biasness. Data collection was done using the questionnaire to ensure sufficient data was collected from the respondents. Descriptive statistics assisted in the determination of respondent’s views and opinions on every variable. Qualitative data was analysed using content analysis into meaningful, precise and comprehensive statements and presented in quotations. Data analysis was done using SPSS version 21 and data presented in form of figures and tables. The study ensured that all ethical considerations were considered by the study. The findings were that most employed Income Generating Units in Public Universities were Collection of rental fees, Evening and executive programs and Trainings of both short and long courses while the least was established to be Sales of memorabilia and books. All the financial control mechanism investigated namely internal audit, internal control measures, risk management strategies and credit policies had large extents of adoption in the selected universities. The results of the regression analysis showed that the financial control mechanisms investigated had a significant positive relationship on performance of the IGUs. Specifically, 47% of the variation of the performance of IGUs was established to be explained by the studied factors. The study concluded that the performance of the IGUs among the selected public universities was largely accounted for by the implemented financial control measures. Therefore effective financial control mechanisms is concluded to lead to better IGU performance whereas shortcomings in the financial control mechanisms is concluded to lead to diminished returns in the IGUs. The study recommended that the management in charge of the IGU department in the public universities to prioritize the formulation, implementation and monitoring of financial control mechanisms in the IGUs. To facilitate effective financial controls, the study recommended that the management especially those in the audit section to conduct regular checks and inspections on the IGUs. Additionally, frequent reforms were recommended to address the shortcomings experienced in integrating financial control measures in IGUs.

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